Los Angeles Chargers offensive lineman Russell Okung wants to help democratize home buying.
That’s why he became an angel investor in Loftium, a new company that provides prospective homeowners with money towards their down payment in exchange for a cut of their income from a very familiar housing-related company — Airbnb.
“For most, the idea of homeownership is just a pipedream, especially in a city like Seattle with median home prices of $690K, up 15% over the past year,” Okung, a former Seattle Seahawks player, wrote in Medium.
Submit Your Nominations For The SportTechie Awards!
Loftium, founded by Yifan Zhang, employs a revenue-sharing business model that provides homebuyers with money toward their down payment. In exchange, the homebuyers agree to rent out a spare bedroom in the new house through Airbnb for 12 to 36 months and share that income with Loftium, according to the startup. There are also no income or cost restrictions.
“Our team is comprised of millennial first-time and soon-to-be homebuyers who have personally struggled with the down payment, especially in our home city of Seattle. This isn’t a local problem – for over two thirds of renters around the country, the down payment is the biggest hurdle to owning a home,” Zhang wrote in an introductory blog post.
Get The Latest Sports Tech News In Your Inbox!
The company works with Umpqua Bank to provide the typical home-related financials, which is where the process begins. A prospective homeowner picks a house and applies for a typical home loan through the bank or another approved lender — satisfying the lender’s lending requirements — and contributes 1 percent of the down payment. Using an algorithm, Loftium then calculates the income potential of a spare room and cuts a check for up to $50,000 for the owner to use toward the rest of the down payment.
Loftium’s contribution is, according to the company, decidedly not a loan or any other form of credit. Loftium also helps homeowners out with a rental starter kit, software, pricing and support. Okung also notes in Medium that if the rental is not booked enough to generate Loftium’s income expectation, the company takes on the remaining burden.
“Launching in Seattle provides the opportunity for Loftium to test the model on a smaller scale, and for homeowners needing some help with their down payment to test the real estate market, and make their dreams come true, with the goal of generating extra income based on budget and location, not just getting the prettiest house,” Okung added. “I’m looking forward to how my fellow Seattleites take advantage of this program.”